A large group of banks and export credit agencies have signed the US$4.4bn financing for Rio Tinto’s vast Oyu Tolgoi copper mine in Mongolia, drawing one of mining’s longest sagas towards a conclusion.

The finance represents 80% of the value of the full mine, while the government of Mongolia will receive 55% of the total output value for the project’s life.

Rio Tinto spent more than four years trying to finalise the deal, with numerous fallouts with the Mongolian government over ownership and contractual issues. In total, 20 lenders participated, including 15 commercial banks, five ECAs and a range of development finance institutions.

The development financiers and ECAs involved are:

Export Development Canada (EDC), the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the Export-Import Bank of the United States (US Exim), the Export Finance and Insurance Corporation of Australia (Efic).

“When Oyu Tolgoi is up and running, we expect the market to be in a structural deficit at that point,” Jean-Sebastien Jacques, Rio Tinto

The first is a 15-year A Loan worth US$800mn and priced at Libor plus 3.78% pre-completion and Libor plus 4.78% post-completion.

The second component is an ECA loan with two tranches: a 14-year US$900mn tranche and a 13-year US$400mn tranche. The first was priced at 3.65% pre-completion and 4.65% post-completion. The second tranche is from the Export Import Bank of the United States (US Exim and is priced at a fixed rate of interest based on US Treasury rates, to be determined at the time of first disbursement.

The third component is a Miga-insured US$700mn tranche with a 12-year tenor, priced at Libor plus 2.65% pre-completion, rising to Libor plus 3.65% post-completion.

The final lump is a US$1.6bn 12-year B loan priced at 3.4%, rising to 3.65%.

Rio Tinto has revised the cost of the mine upward to US$6bn, with CEO for copper and coal Jean-Sebastien Jacques saying that “market conditions have changed dramatically in the last six months” and that the company “should have a better understanding of the final costs of the underground early next year”.

The mine is scheduled to be operational within seven years and Jacques says that he expects the struggling copper market to have recovered by then, despite having lost 26% in 2015 in the worst year since the 2008 financial crash.

He says: “When Oyu Tolgoi is up and running, we expect the market to be in a structural deficit at that point. From our perspective, Oyu Tolgoi will be part of the solution to provide the copper that’s required in China or anywhere else.”

Meanwhile the Mongolian government has hailed the deal as “landmark”. Bayanjargal Byambasaikhan, CEO of Erdenes Mongol – the government’s national investment vehicle – says in a statement:

“This landmark deal is a significant milestone for the world-class Oyu Tolgoi underground mine, and for Mongolia and its three million citizens. Reaching this point has had its challenges, but this exceptional financing, and from such a prestigious set of global lenders, underscores the vast potential of the mine and the strong collaborative partnership that has been forged between stakeholders in Oyu Tolgoi.”